Is Zillow (Z) Stock a Buy After Falling Nearly 13% in 1 Day?

Zillow stock dropped 13% in a single day in early August and has declined 60% over the past year, pressured by ongoing real estate market headwinds and new competition from Google entering real estate listings. Despite the sell-off, the company remains profitable and is leveraging AI implementation to drive user engagement and increase time spent on its platform, according to a Motley Fool analysis.

The dual pressure from macro conditions in real estate and Google's expansion into listings presents material risks to Zillow's traffic and lead-generation model. However, the company's AI initiatives appear to be gaining traction in offsetting competitive threats by deepening user engagement metrics.

The 60% drawdown over 12 months reflects broader real estate market weakness as mortgage rates have remained elevated, crimping transaction volumes that drive Zillow's revenue. The single-day 13% plunge in early August suggests investors are repricing the stock around both cyclical headwinds and structural threats from Big Tech entrants.